PARIS --- India’s prevarication on the long-delayed contract to buy 18 Rafale fighters and assemble 108 more could end up seriously disrupting its air force modernization plans, as Egypt’s order for 24 aircraft, and a possible order for 36 more by Qatar, will absorb available production and push back deliveries to India.
It is already too late for the 18 French-made aircraft that the Indian Air Force urgently needs to be delivered beginning in 2018, as originally planned, and additional export orders could delay them into the next decade.
France has stretched out its own deliveries to reduce annual payments, and the current Rafale production rate at Dassault Aviation’s Bordeaux-Mérignac plant is of 11 aircraft per year -- the minimum rate the company says is economically feasible.
Deliveries to France this year include 7 two-seat nuclear strike variants for the French air force and 4 Rafale M carrier variants for the navy, none of which can be exported, initial deliveries to Egypt will be made using aircraft already in service with the French air force, and which will have to be replaced later.
Delivery of new aircraft to Egypt is not slated to begin before 2018, as ramping up production requires about three years, as the Rafale supply chain, comprising about 500 companies accustomed to being drip-fed orders at the current minimum rate, needs time to ramp up and to order and receive long-lead items.
“Egypt wants its aircraft quickly, and we have been authorized to take some aircraft now being built for France,” Dassault Chief Executive Eric Trappier said in a Feb 13 interview with RTL radio. Dassault Aviation did not return telephone calls seeking clarification.
Trappier added that “Qatar and other neighboring countries are also interested,” but did not name them. Bahrain, Kuwait and the United Arab Emirates have been previously cited as possible buyers of Rafale.
France is to receive 26 more Rafales by 2019, and a Qatari order for 36 Rafales would take up another three or four years of production, leaving few free delivery slots before 2020 at the earliest.
Indian Air Force hobbled by obsolescence
Meanwhile, even as it drags its feet on the Rafale contract, the combat strength of the Indian air force is evaporating because it must retire its obsolete fighters much faster than they can be replaced.
The Indian Air Force has an authorized strength of 42 fighter squadrons, each with 18 aircraft. However, by last year its fighter strength had dropped to only 25 squadrons -- 14 of them equipped with elderly MiG-21s and MiG-27s -- according to a late December report by the Parliamentary Standing Committee on Defence.
The Committee’s report “expressed concern over the dwindling number of fighter squadrons in the Indian Air Force….The revelation is astonishing, and the committee feels that the paradox in the required and sanctioned strength needs to be rectified at the earliest,” The Hindu reported Dec. 29.
Ironically, it is to avoid just such a fighter shortfall that India launched the Medium Multi-Role Combat Aircraft (MMRCA) competition in 2007, after earlier efforts to procure a new fighter failed. Rafale was declared winner in January 2012, but contract negotiations have dragged on since.
“India is a country that takes its time…what is taking time here is setting up an industrial partnership that will ultimately allow India to produce all the parts” for the complete aircraft, Dassault’s Trappier said.
In a nutshell, India wants Dassault to provide a warranty for the aircraft assembled ad later produced in India by state-owned Hindustan Aeronautics (HAL).This would have the French firm taking on contractual responsibility for HAL’s production, over which it however has no control.
Dassault, which had originally selected privately-owned Reliance Industries as its partner for the program, is steadfast in its refusal to provide such a guarantee, which according to a senior company official would be “a direct route to bankruptcy.”
“Dassault will not be responsible for the whole contract [because] it’s a co-management arrangement,” French defense procurement chief Laurent Collet-Billon told reporters here Feb. 9, adding that the company had the government’s full backing in this dispute.
He jokingly added that having Dassault guarantee HAL’s work “cannot be a problem, because it was not included in the original RFP” and so cannot be added retrospectively.
Faced with persistent– but so far baseless – allegations of corruption in past defense deals, India in recent years enacted inflexible defense procurement procedures and regulations that allow no latitude in how it manages the MMRCA project.
Having thus painted itself into a corner, India must find a face-saving solution that will allow it to sign the contract without appearing to back down on its warranty demands. As the forthcoming visit to Paris by Prime Minister Narendra Modi in April provides an ideal occasion for signing, India has less than two months to find a way out.